Regulator blocks bonus for energy overpayers

Ofgem is cracking down on a small supplier trying to compensate overcharged customers to protect the big six

Ovo has the third-cheapest deal with a typical annual bill of £1,028 for dual fuel (Getty)

THE energy regulator has ordered a supplier to stop paying interest on bill
overpayments in a move that will disappoint millions of customers who are
regularly in credit, The Sunday Times can disclose.

This is the first time an energy provider has been challenged for paying
interest because the practice is deemed unfair on rivals that pay nothing.

Consumer groups have called for more suppliers to compensate those who overpay
due to inaccurate bills or high direct debit charges.

Analysis by the comparison firm Uswitch last week showed customer accounts
held £1.2bn in overpayments. It said 52% of accounts are in credit, compared
with 49% a year ago. About 260,000 customers are in credit by more than £500.

Ovo, a challenger to the big six energy firms, has paid 3% on overpayments
since 2010 after entering the market a year earlier. It has paid £1m in
interest, it said.